The Stock Market Could Stop Short Of New Highs - But That Seems Unlikely Now
Buy signals and bullish indicators are coming into focus. It's important to monitor the difference between VIX VIX and the 20-day realized volatility of the S&P 500 SPX. There have only been a few times in U.S. stock-market history when VIX minus HV20 has fallen below -10, and this most recent move was one of them. It reached -26 at its nadir a little over a week ago.But now, the situation has reversed and HV20 has fallen to be almost equal to the VIX. This is an intermediate-term buy signal for the U.S. stock market. Specifically, the differential dropped far enough by May 9 in order to generate the buy signal. So, we are going to act on that with a long-term position in SPDR S&P 500 ETF Trust SPY options.Equity-only put-call ratios continue to fall sharply. That means that these ratios remain bullish in their outlook for the stock market. There w